Dana Gas PJSC, the Middle East’s largest regional private sector natural gas company, has announced its preliminary financial results for the year ended 31st December 2010.
Revenue from the sale of hydrocarbons increased to AED 1,785 million, with gross profit reaching AED 781 million. These figures represent increases of 40% and 79% respectively, compared to 2009 and reflect the Company’s continued production growth in Egypt and from the Khor Mor field in the Kurdistan Region of Iraq.
Earnings before interest, tax, depreciation, amortization and exploration (EBITDAX) was AED 1,034 million. In 2009 EBITDAX was AED 1440 million due to a one-off gain reported in 2009 from the sale of a 10% interest in the Kurdistan Region of Iraq assets.
The resulting full year net profit for Dana Gas in 2010 was AED 158 million compared to AED 88 million in 2009, an 80% increase which reflects growing production and higher oil prices especially in the fourth quarter of 2010.
The above Income Statement results exclude an unrealized gain of AED 118 million during 2010 on the Company’s investment in MOL (the Hungarian oil and gas company, who are one of our partners in Kurdistan), booked directly to equity in line with the Company’s published accounting policy. This gain for 2010 comes on top of an unrealized gain during 2009 of AED 370 million.
The “Total Comprehensive Income” for 2010 is AED 276 million.
The U.K. based engineering and advisory firm, Gaffney, Cline & Associates have carried out an independent evaluation of Dana Gas Egypt’s hydrocarbon reserves as at 31 December 2010. Following this review, the Company’s gross proved reserves (1P) are estimated to be 89 milions of barrels of oil equivalent (“MMBOE”) (in 2009: 47 MMBOE). The gross proved and probable reserves (2P) are estimated to be 152 MMBOE (in 2009: 132 MMBOE). The gross proved, probable and possible reserves (3P) are estimated to be 253 MMBOE (in 2009: 222 MMBOE).
The 2P reserves results give a total reserves addition of 15% (after 2010 production) and 27% (before 2010 production). The total production replacement ratio associated with this 2P reserves increase is 229%.
During 2010, Dana Gas Egypt produced gas, LPG ,condensate and crude oil at an average rate of just over 42,300 barrels of oil equivalent per day (“boepd”), an increase of over 20% compared to 2009, thanks to production from Dana Gas’ recent gas discoveries that were brought on stream during the year. Additionally in the Kurdistan Region of Iraq, gas and condensate was produced at an average rate, net to Dana Gas’ 40% interest, of 13,200 boepd.
Dana Gas Egypt drilled a total of eleven exploration wells during the year which yielded seven discoveries. The reserves associated with these discoveries are reflected in the year end report from Gaffney, Cline & Associates as discussed above. The Income Statement also reflects the costs that have been written off for dry holes drilled during the year.
Commenting on the performance for 2010, Dana Gas Chief Executive Officer, Mr. Ahmed Al-Arbeed, said: “Dana Gas has continued to make progress in its operations during 2010 and this is reflected in our increasing profits. I am particularly pleased that 2010 has been a year in which we have delivered consistent financial results in every quarter which reflect our strong operational performance, with minimal exceptional items. Our Egypt exploration programme continues to deliver class leading performance, yielding seven discoveries in 2010 resulting in a 2P reserves replacement ratio of 229%.”
“In the Kurdistan Region of Iraq, Dana Gas continues to supply gas to the Erbil and Bazian power stations at increasing rates producing 76% higher volumes in 2010 compared to 2009 which will further increase now that LPG production has commenced from our LPG Plant.” said Mr. Al-Arbeed.